Carmike Cinemas’ First Quarter Revenue Rises 22.9% to $158.9 Million

  Carmike Cinemas’ First Quarter Revenue Rises 22.9% to $158.9 Million

       Box Office Admissions Increase 20.4% and Attendance Rises 16.9%

 Concession and Other Per Patron Spending Rises for 17th Consecutive Quarter

             Definitive Merger for Sale of Screenvision Announced

Business Wire

COLUMBUS, Ga. -- May 5, 2014

Carmike Cinemas, Inc. (NASDAQ: CKEC):

              
Webcast/Conference Call TODAY, Monday, May 5 at 5:00 p.m. ET
                
WEBCAST LINK:   www.carmikeinvestors.com  (archived for 30 days)
                
CALL DIAL-IN:   800/920-2977 or 212/231-2920 (international callers)
                
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Carmike Cinemas, Inc. (NASDAQ: CKEC), a leading entertainment, digital cinema
and 3-D motion picture exhibitor, today reported results for the three-month
period ended March 31, 2014, as summarized below.

                                  
SUMMARY FINANCIAL DATA

(unaudited)
                                         
                                         Three Months Ended
                                         March 31
(in millions)                            2014            2013
Total operating revenues                 $   158.9       $   129.3
Operating income                             8.1               3.4
Interest expense                             13.1              12.3
Theatre level cash flow ^(1)                 27.5              22.7
Net loss                                     (3.2   )          (5.8   )
Adjusted net loss ^(1)                       (2.6   )          (3.6   )
Adjusted EBITDA ^(1)                         20.7              17.2
                                                           
(in millions)                            Mar. 31, 2014     Dec. 31, 2013
Total debt^(1)                           $   453.7         $   455.3
Net debt^(1)                             $   319.8         $   311.4

      Theatre level cash flow, adjusted net loss, adjusted EBITDA, total debt
      and net debt are supplemental non-GAAP financial measures.
      Reconciliations of theatre level cash flow and adjusted EBITDA to net
(1)  income and adjusted net income to net income for the three months ended
      March 31, 2014 and 2013, as well as a schedule of total debt and net
      debt as of March 31, 2014 and December 31, 2013, are included in the
      supplementary tables accompanying this news announcement.
      

“Carmike’s theatre circuit outperformed box office and attendance gains in Q1,
as well as our 17th straight quarter of higher year-over-year concessions and
other per patron spending,” stated David Passman, Carmike Cinemas’ President
and Chief Executive Officer. “The Company’s per screen admissions revenue and
attendance grew approximately 12% and 9%, respectively, versus the prior-year
period. This compares to reported domestic industry box office revenue and
attendance growth of approximately 6% and 5%, respectively, during the
quarter.

“A more compelling, diverse and well-spaced film slate, versus the comparable
period, positive contributions from the first full quarter of operating
results from the nine theatres and 147 screens we acquired from Muvico in late
2013, as well as several recently opened Carmike locations, drove strong top
line financial performance in Q1.

“Innovative concessions and promotional strategies combined with Carmike’s
customer-centric focus on providing guests with an exceptional experience on
every visit, continue to be key elements of our operating success. Concessions
and other sales per patron increased over 8% to a Company record $4.52 in Q1
2014, further underscoring our achievements.

“During the quarter, we announced plans to open three state-of-the-art
theatres in Fayetteville, NC, Spring Hill, TN and Traverse City, MI. We have a
total of six announced locations under construction. Subsequent to
quarter-end, we also completed a remodel of our Mount Lebanon, PA theatre in
the Pittsburgh suburbs and opened the Tiger 13 in Opelika, AL, not far from
the Auburn University campus. There are a number of other new-builds in the
planning or advanced negotiations stages. We continue to actively search for
acquisitive and organic growth opportunities that will help us achieve our
circuit expansion target.

“Today’s announcement by National CineMedia to acquire Screenvision, of which
Carmike owns approximately 19%, represents the successful culmination of
nearly three years of incredibly hard work by Screenvision’s management team,
associates, partners and owners. We are pleased to be joining the NCM network
in the near term, and look forward to working with Kurt Hall and the other
members of the merged organization’s management team.

“We believe that Carmike is well positioned to capitalize on future
opportunities for circuit growth. Our balance sheet continues to strengthen
and we have ample cash balances on hand with a very manageable debt level. In
addition, our operating results continue to improve as evidenced by our
significant year over year Q1 growth in operating income and bottom line
results. We consider the recent ratings upgrade of our senior secured notes
further recognition of the continued improvement in our financial position as
we continue to identify and act on growth opportunities in 2014,” concluded
Mr. Passman.

                                              
THEATRE PERFORMANCE STATISTICS
(unaudited)
                                                   
                                                   Three Months Ended March 31
                                                   2014            2013
Average theatres                                      252              246
Average screens                                       2,660            2,480
Average attendance per screen^(1)                     5,104            4,687
Average admissions per patron^(1)                  $  7.19           $ 7.02
Average concessions/other sales per                $  4.52           $ 4.18
patron^(1)
Total attendance (in thousands)^(1)                   13,578           11,620
Total operating revenues (in thousands)            $  158,924        $ 129,283

(1)  Includes activity from theatres designated as discontinued operations
      and reported as such in the consolidated statements of operations.
      

Carmike Cinemas’ Chief Financial Officer Richard B. Hare stated, “Carmike
generated another quarter of solid results, including increases in box office
receipts of 20.4%, concessions and other revenue of 27.2% and total operating
revenues of 22.9%. Average Q1 admissions per patron increased 2.4% to $7.19,
while average concessions and other revenue per patron rose 8.1% to an
all-time quarterly record of $4.52. In aggregate, during the 2014 first
quarter Carmike guests spent $11.71 per visit to our entertainment complexes,
also a record level.

“Carmike’s Q1 2014 film exhibition costs as a percentage of admissions
revenues was 54.2%, compared to 53.1% in Q1 2013. The increase was largely due
to higher film rent associated with top tier films compared to the year-ago
period. Concession costs as a percentage of concessions and other revenue
decreased from 12.3% in the first quarter of 2013 to 11.6% due primarily to a
decrease in discount and other promotional activities.

“In an effort to enhance visibility into our theatre operating costs, we are
now reporting separate line items for salaries and benefits, theatre occupancy
costs and other operating costs on our consolidated statement of operations.
These were previously included in other theatre operating costs. Salaries and
benefits rose $3.2 million to $21.5 million and theatre occupancy costs rose
$5.1 million to $20.4 million in Q1 2014 due primarily to recent acquisitions
and new-builds. Other theatre operating costs were $29.4 million, compared to
$23.8 million in the 2013 period, due primarily to incremental operating
expenses resulting from our expanded circuit.

“General and administrative expenses were $7.5 million, versus $6.0 million in
the 2013 period, partially due to outside professional fees. As expected,
quarterly interest expense rose to $13.1 million, due principally to the
assumption of long-term lease obligations associated with the acquired Muvico
screens.

“Carmike’s Adjusted EBITDA rose 20.0% to $20.7 million and theatre level cash
flow increased 21.3% to $27.5 million. At quarter-end we had $319.8 million of
net debt, versus $311.4 million at December 31, 2013, reflecting an aggregate
of capital leases and long-term financing obligations, plus senior notes.
Carmike's quarter-ending balance sheet included cash of $133.9 million. Our
top priority for cash deployment remains circuit growth,” concluded Mr. Hare.

Supplemental Financial Measures

Theatre level cash flow, EBITDA, adjusted EBITDA, adjusted net income, total
debt and net debt are supplemental non-GAAP financial measures used by Carmike
to evaluate its operating performance. Carmike defines theatre level cash flow
as adjusted EBITDA, as defined below, plus general and administrative
expenses. Carmike believes that theatre level cash flow is an important
supplemental measure of operating performance for a motion picture exhibitor’s
operations because it provides a measure of the core operations, rather than
factoring in items such as general and administrative expenses and
depreciation and amortization, among others. In addition, Carmike believes
that theatre level cash flow, as defined, is a widely accepted measure of
comparative operating performance in the motion picture exhibition industry.
Adjusted net loss is defined as net loss plus impairment of long-lived assets,
merger and acquisition-related expenses, lease termination charges, and (gain)
loss on sale of property and equipment, net of tax. Carmike believes adjusted
net income is an important supplemental measure of operating performance for a
motion picture exhibitor because it provides a measure of core operations.
Total debt is defined as the sum of current maturities of capital leases and
long-term financing obligations, long-term debt and capital leases and
long-term financing obligations (less current maturities). Net debt is defined
as total debt less cash and cash equivalents. EBITDA is defined as net income
plus income tax benefit, interest expense and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA plus loss from unconsolidated affiliates,
loss from discontinued operations, merger and acquisition-related expenses,
lease termination charges, (gain) loss on sale of property and equipment, and
impairment of long-lived assets. Carmike believes that EBITDA and adjusted
EBITDA are important supplemental measures of operating performance for a
motion picture exhibitor’s operations because they provide measures of core
operations.

About Carmike Cinemas (www.carmike.com)

Carmike Cinemas, Inc. is a U.S. leader in digital cinema, 3-D cinema
deployments and one of the nation's largest motion picture exhibitors. The
Company has 253 theatres with 2,670 screens in 37 states. The circuit includes
38 premium large format auditoriums featuring state-of-the-art technology and
luxurious seating, including 23 "BigDs," 13 IMAX auditoriums and two MuviXL
screens. As "America's Hometown Theatre Chain," Carmike's primary focus is
mid-sized communities.

Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the federal securities laws. Statements that are not historical facts,
including statements about our beliefs, expectations and future performance,
are forward-looking statements. Forward-looking statements include statements
preceded by, followed by or that include the words, “believes,” “expects,”
“anticipates,” “plans,” “estimates,” “seeks” or similar expressions. Examples
of forward-looking statements in this press release include the Company’s
expectations regarding box office performance, food and beverage strategies,
circuit expansion, second quarter performance, the upcoming film slate,
additional acquisition opportunities and the Company’s ability to complete
future transactions. Forward-looking statements are only predictions and are
not guarantees of performance. These statements are based on beliefs and
assumptions of management, which in turn are based on currently available
information. The forward-looking statements also involve risks and
uncertainties, which could cause actual results to differ materially from
those contained in any forward-looking statement. Many of these factors are
beyond our ability to control or predict. Important factors that could cause
actual results to differ materially from those contained in any
forward-looking statement include, but are not limited to: the ability of
National CineMedia to secure approvals and satisfy conditions necessary to
complete the acquisition of Screenvision; our ability to achieve expected
results from our strategic acquisitions, general economic conditions in our
regional and national markets; our ability to comply with covenants contained
in our senior secured credit agreement and the indenture governing our 7.375%
Senior Secured Notes due 2019; our ability to operate at expected levels of
cash flow; financial market conditions including, but not limited to, changes
in interest rates and the availability and cost of capital; our ability to
meet our contractual obligations, including all outstanding financing
commitments; the availability of suitable motion pictures for exhibition in
our markets; competition in our markets; competition with other forms of
entertainment; and other factors, including the risk factors disclosed in our
Annual Report on Form 10-K for the year ended December 31, 2013, under the
caption “Risk Factors.” We believe these forward-looking statements are
reasonable; however, undue reliance should not be placed on any
forward-looking statements, which are based on current expectations. Further,
forward-looking statements speak only as of the date they are made, and we
undertake no obligation to update publicly any of them in light of new
information or future events.

                                                           
CARMIKE CINEMAS, INC. and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                                                   
                                                   Three Months Ended

                                                   March 31
                                                    2014          2013    
                                                                   
Revenues:                                          (Unaudited)     (Unaudited)
Admissions                                         $ 97,572        $ 81,055
Concessions and other                               61,352        48,228  
                                                                   
Total operating revenues                             158,924         129,283
                                                                   
Operating costs and expenses:
Film exhibition costs                                52,889          43,016
Concession costs                                     7,119           5,929
Salaries and benefits                                21,534          18,359
Theatre occupancy costs                              20,361          15,214
Other theatre operating costs                        29,382          23,798
General and administrative expenses                  7,498           6,015
Lease termination charges                            —               3,063
Depreciation and amortization                        11,771          10,201
(Gain) loss on sale of property and                  (67     )       80
equipment
Impairment of long-lived assets                     358           192     
                                                                   
Total operating costs and expenses                  150,845       125,867 
                                                                   
Operating income                                     8,079           3,416
Interest expense                                    13,116        12,298  
                                                                   
Loss before income tax and income from               (5,037  )       (8,882  )
unconsolidated affiliates
Income tax benefit                                   (2,010  )       (4,251  )
Loss from unconsolidated affiliates                 (85     )      (1,015  )
                                                                   
Loss from continuing operations                      (3,112  )       (5,646  )
Loss from discontinued operations                   (52     )      (137    )
                                                                   
Net loss                                           $ (3,164  )     $ (5,783  )
                                                                   
Weighted average shares outstanding:
Basic                                                22,821          17,547
Diluted                                              22,821          17,547
                                                                   
Net income per common share (Basic and
Diluted):
Loss from continuing operations                    $ (0.14   )     $ (0.32   )
Loss from discontinued operations, net              —             (0.01   )
of tax
                                                                   
Net loss per common share                          $ (0.14   )     $ (0.33   )

                                                   
CARMIKE CINEMAS, INC. and SUBSIDIARIES
SUPPLEMENTARY NON-GAAP RECONCILIATIONS
                                                         
THEATRE LEVEL CASH FLOW AND ADJUSTED EBITDA (Unaudited)
($ in thousands)
                                                         
                                                         
                                                         Three Months Ended
                                                         March 31,
                                                           2014        2013   
                                                                         
                                                         (Unaudited)     (Unaudited)
Net loss                                                 $  (3,164 )     $  (5,783 )
Income tax benefit                                          (2,010 )        (4,251 )
Interest expense                                            13,116          12,298
Depreciation and amortization                              11,771        10,201 
                                                                         
EBITDA                                                      19,713          12,465
Loss from unconsolidated affiliates                         85              1,015
Loss from discontinued operations                           (52    )        (137   )
(Gain) loss on sale of property and                         (67    )        80
equipment
Impairment of long-lived assets                             358             192
Lease termination charges                                   —               3,063
Merger and acquisition-related expenses                    614           531    
                                                                         
Adjusted EBITDA                                          $  20,651      $  17,209 
                                                                         
General and administrative expenses                        6,884         5,484  
                                                                         
Theatre level cash flow                                  $  27,535      $  22,693 

                                                           
TOTAL DEBT AND NET DEBT (Unaudited)
($ in thousands)
                                                                 
                                               Mar. 31, 2014     Dec. 31, 2013
Current maturities of capital leases and       $  7,231          $  6,870
long-term financing obligations
Long-term debt                                    209,637           209,619
Capital leases and long-term financing           236,804         238,763  
obligations, less current maturities
                                                                 
Total debt                                     $  453,672        $  455,252
Less cash and cash equivalents                   (133,910 )       (143,867 )
                                                                 
Net debt                                       $  319,762       $  311,385  

                                                     
ADJUSTED NET INCOME (Unaudited)
($ in thousands)
                                                          
                                                          Three Months Ended
                                                          March 31,
                                                            2014        2013   
                                                                          
                                                          (Unaudited)     (Unaudited)
Net loss                                                  $  (3,164 )     $  (5,783 )
Impairment of long-lived assets                              358             192
(Gain) loss on sale of property and                          (67    )        80
equipment
Lease termination charges                                    —               3,063
Merger and acquisition-related expenses                      614             531
Tax effect of adjustments to net loss                       (389   )       (1,662 )
                                                                          
Adjusted net loss^(1)                                     $  (2,648 )     $  (3,579 )
                                                                          
Weighted average shares outstanding (basic)                  22,821          17,547
Weighted average shares outstanding (diluted)                22,821          17,547
Adjusted net loss per share (basic and diluted)           $  (0.12  )     $  (0.20  )

      Adjustments to net loss for the three months ended March 31, 2014 and
(1)  2013 are shown net of tax effect of 43.0% which represents the estimated
      combined federal and state tax rates for each period.

Contact:

JCIR
Robert Rinderman or Jennifer Neuman
212-835-8500
ckec@jcir.com
or
Carmike Cinemas, Inc.
Richard B. Hare, 706-576-3416
Chief Financial Officer
 
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